Ride-sharing giant Uber has been backsliding into ignominy as its executives have gotten entangled in scandal, its corporate offices have face sexual-harassment claims, and its operations have run into protests by angry displaced cabbies across Europe. As the company once vaunted as a dynamic “disruptor” faces public backlash, the rideshare business model is also coming under greater scrutiny.
The rideshare app industry has invested the bulk of its political capital in building top-down monopoly power, according to new research on Uber and other ridesharing companies’ anti-regulatory crusade. Lifting a page from the playbook of Big Tobacco and the firearms industry, Uber and Lyft lobbyists have blocked, bribed and cajoled their way out of regulations and tax codes in city after city.
According to an analysis of Uber and Lyft by the National Employment Law Project (NELP) and Partnership for Working Families (PWF), the ridesharing apps pursue a two-track strategy of, on the one hand, reshaping politics through legislative lobbying and, on the other, running slick public-relations campaigns that associate their brands with consumer choice and empowering drivers to “be their own bosses.” Ultimately, both strategies act to lock in a market structure that preempts collective-bargaining rights and local consumer and worker protections.
To circumvent federal labor protections and other local and state regulations, the rideshare industry lobby has been “pushing legislation that exempts their drivers from state labor laws, such as unemployment insurance, workers compensation, and minimum wage.” The result is lower costs per ride, perhaps—but typically at the expense of drivers forced to self-finance their cars, insurance, and whatever road-safety and occupational-health hazards they encounter on long shifts with volatile pay rates and often inconsistent ride pick-ups. Drivers have to contend with no disability pay, no paid sick days, and no protection from abusive or discriminatory customers (not even when the CEO himself is throwing a tantrum in the backseat).
By controlling drivers’ labor conditions without granting employee rights, the ridesharing apps put drivers in a difficult situation, especially when they face the dreaded account deactivation. Workers have little recourse to challenge a deactivation because they lack coverage under the federal Fair Labor Standards Act and other protections that normal employees are entitled to. By extension, “drivers no longer have access to redress or benefits afforded to other workers” under state law. On top of the legal barriers to demanding your job back from something that is, at the end of the day, just software on your device, a deactivated driver is also left without unemployment insurance or any form of severance pay.